SPECIAL
Selling to Japan may be easier than expected

Japanese business experts recently gave some tips on how to enter the Japanese market, and the potential rewards that can be found there. Jeerawat Na Thalang reports.
Entering the Japanese market may not be as difficult as many Thai exporters think and, according to experts, it requires only a thorough understanding of the nature of the market, which is one of the most dynamic in the world, with a population of more than 100 million affluent consumers. A recent teleconference seminar featuring Japanese economists and business experts has offered a few lessons on the market as well as a few of tips on how to successfully sell to Japan. For instance, the country is moving away from the notion that it is an "expensive market". Moreover, its ageing population is a major influence on market trends. Sumimaru Odano, of Shiga University, said the Japanese economy was undergoing change. Prior to the 1990s, there was a perception that everything in Japan was expensive because of the relative appreciation of the yen. However, now that the yen has depreciated, Japanese people have more price-awareness. After the so-called "bursting of the economic bubble", the Japanese economy went through years of hardship in the 1990s, with persistent deflationary pressure. Many called it "the Lost Decade Syndrome", Odano said. Since then, there has been a conscious effort to get rid of the "expensive country" notion. McDonald's restaurants triggered the trend by introducing the "80 Yen hamburger". Then Yoshinoya became the country's most successful fast-food chain, offering sukiyaki beef and rice at affordable prices. Japan-based Uniglo became one of the most successful apparel companies by making garments in low-cost China and selling them in expensive countries such as Japan and the United Kingdom. Odano said the fact that "100-Yen Shops", where a wide range of goods is sold for just ¥100 per article, have become the highest growth retail shops in Japan is evidence of the move away from the expensive image. Japan is now receiving more low-priced imported goods, mainly from China and other parts of Asia, he said. Consumer demand has been suppressed by uncertainty over jobs and pension prospects, and companies are making efforts to reduce their costs, following moves to deregulate aspects of the market. Overall, the Japanese market has two certainties: economic shrinkage and an ageing society, Odano said. Hideo Kimura, executive managing director of Strategic International Management Associates, said one out of five Japanese is aged 65 or older, and the proportion of this age group is expected to exceed 35 per cent in 2050. These senior people, he said, had created a new market as they have lots of time, reasonable amounts of money and are concerned about their health. They are demanding healthy food such as raw fish, green tea, bean curd, red wine, mushrooms and fresh vegetables because they want to live longer. Jim Matsunaga, of JM Consulting, agreed, saying there are big opportunities for health-related food and drinks in the Japanese market, including honey, tea, red wine and seaweed. There are now organic food corners at some Japanese supermarkets. However, he said would-be exporters should make sure their products can pass the tough Japanese laws governing imported food. One example of success is a green tea made in Thailand from organically grown mulberry, he said. It became popular after being recommended to consumers by a Japanese university, and is being exported to Japan as "Otop" tea. Matsunaga said about 17 million Japanese tourists go abroad every year and are fond of buying souvenirs and gifts for their family and friends. American or European tourists, on the other hand, may buy only a few items for themselves. This custom led the legendary Jim Thompson brand of Thai silk to gain its current international reputation, because Japanese tourists bought Jim Thompson products for their friends and families when they came to Thailand. Kimura said a survey of household economy conducted by Japan's Internal Affairs and Communication Ministry last year showed that an average Japanese household comprises 3.44 persons. The head of the household is 46.9 years old and has an income of US$4,992 (Bt189,345) per month. The household's living expenditure is $3,139 and its actual expenditure is $3,931, leaving a surplus of $1,060. Kimura said the figures could be relevant for exporters thinking of the Japanese market. For instance, the average household's monthly expenditure for food is $678; clothing and footwear, $143; education, $176; and reading and recreation, $315. Kimura advises exporters wishing to enter the Japanese market to bear in mind that it is demanding. It expects a full range of product mix and customers expect high-quality, safe products. Japanese buyers also expect security of supply.
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